In a sign the Rapid City economy maybe picking up steam, work has started on an 800-acre development that is expected to include hundreds of apartments and homes along with commercial and industrial development on the city's eastern edge.
The long-term project, which has been in the works for five years, also signals that considerable future growth will be occurring along the now largely undeveloped north-south Elk Vale Road corridor.
The project is being developed by Dream Design International, the president of which is Hani Shafai of Rapid City.
"This is a huge development for this part of town," he said.
Though 16 of the single-family homes have already been sold, the first major phase of the project will break ground later this month: 216 apartments, most of them mid-priced, two-bedroom units, on Minnesota street just off Elk Vale Road. The city has issued a $50 million building permit for the complex.
The apartments will take just a year and a half to finish, and about 35 to 40 homes in Elks Crossing will be completed each year for the next several years.
The development heralds good times for the city's housing industry, according to Community Planning Director Brett Limbaugh.
"This is a good indication that the real estate market is coming back because you're seeing a combination of single-family homes and apartment complexes," Limbaugh said. "It adds some more development on the periphery of the city. It's good to have new housing product."
Gateway Apartments is scheduled to break ground in the next few weeks. Only the first phase of 216 units is set in stone and is expected to take about a year and a half to build. The second phase of an additional 200 units will be built if and when demand requires them.
Prices for the single-family homes in the development will range from $180,000 to $400,000. Some homes have already been completed and families have moved in.
Separating the multifamily apartments and the homes is a naturally-occurring drainage ditch with trees and other shrubbery.
The first major section of development will have homes priced between $185,000 and $280,000 and is the farthest west and closest to town, with 25 to 30 expected to be sold per year.
Farther east, the price of homes will increase, as will the lot size. Those houses will run for $250,000 to $400,000, with six to 10 to be sold each year in the neighborhood called Elks Country Estates.
"They're not selling as fast as the other lots," Shafai said, adding that slower sales for higher-end houses is normal.
So far, 16 of the less-expensive lots have been sold. Shafai said most of the new homeowners are young families with children. The houses are custom built.
"They're all pre-sold. They're not even spec lots," he said.
Some of the future residential development relies on extension of Minnesota Street that has yet to be built. The roadway and accompanying utilities — a public infrastructure project — were part of a tax-increment financing district approved by the city council.
Though much of the roadway has been built, a stretch of it that will give access to land to be developed into additional housing and, possibly, a new school, has not. Because the developer missed a deadline for the tax increment financing district, another district will need to be created in the coming months.
But housing isn't all that's planned for the hilly stretch of land, much of which is now nothing but prairie grass and wide open spaces.
A church is planned on Elk Vale Road at the far north end of the development. Commercial retail and office space is planned farther south and west of the apartment complex along the road, though the city hasn't issued building permits for that area.
An industrial area is planned for the far southeast area of the development along Elk Vale Road. A local truck wash, Eagle Sales, a local distributor for Anheuser-Busch, and RCS Storage, a climate-controlled self-storage company, have already moved in there. Forest Product Distributors, a Rapid City wholesale lumber company, has a processing facility there and has plans to expand in the area.
Land even farther east is being considered for an additional residential development called Elks Meadows. Shafai doesn't expect progress to be made on that development until 2015. Next to Elks Meadows is 80 acres of land reserved for another Rapid City public school.
Whether that would be an elementary, middle, high or some other school remains to be seen.
"The needs will be dictated by the demand," Shafai said.